Enzyme makers compete in biofuel breakthrough

Within the same week Danish enzyme makers Novozymes and Dansico each have claimed a breakthrough in their efforts to make biofuels from cellulose. Both are competing for a mjor share in what could become a multi-billion dollar industry.

The companies invested millions in research and development of technology to enable production from products that are outside the food versus fuel debate, such as straw, corn cobs and stalks and sugarcane off-cuts.

The presented new enzymes are close to paying off so far unfulfilled promises made years ago on the option of making cellulosic ethanol.

Genencor, a division of Danisco, says that it had made a technological advance with the launch of an enzyme that it predicted would become the industry standard "in terms of cost and performance".

Novozymes is not so vague and says that it has created an enzyme capable of producing cellulosic ethanol at a cost of $2.25 a gallon ($0.60/litre), which is close to the price of petrol and conventional ethanol in the US.

Scepticism

Given the many false starts in the past, analyst remain sceptical of the breakthrough claims and become more convinced once commercial production has started.

"Some people would claim that cellulosic biofuel is always another five years down the road. We've said for the past two years that we would have the technology ready by 2010 and we have," said Novozymes CEO Riisgaard.

He said full-scale production would start in 2011 when Poet, the big US biofuel producer, is scheduled to open the world's first commercial cellulosic ethanol facility.

The US this month renewed its commitment to increase the proportion of biofuels for cars to 16 billion gallons (60.6 bn litres) to come from cellulosic ethanol by 2020.

If this target is met it would imply annual enzyme sales of about $5 billion of which Novozymes and Danisco would benefit the most.